SIU must investigate government corruption in Gauteng that has stolen from township entrepreneurs and shop owners
20 November 2024
Build One South Africa (BOSA) is calling on the Special Investigating Unit (SIU) to urgently probe corruption within the Gauteng Department of Economic Development (GDED) that has siphoned off millions intended to uplift township entrepreneurs and fix the distribution and supply chain within townships.
This follows shocking revelations involving the department’s implementing partner, Family Tree Holdings (FTH), and their mismanagement of monies related to the set up of three township distribution centres in Thokoza, Kagiso and Mamelodi respectively, as well as their mishandling of the Kasi Mnotho Fund.
Despite the enactment of the Township Economic Development Act (TEDA) and the establishment of the Township Economy Partnership Fund, small business owners in Katlehong, Thokoza, and Vosloorus have been left betrayed. These entrepreneurs were deceived by GDED and FTH in a failed empowerment initiative, which has devastated the very people these programs were designed to support.
BOSA has brought this injustice to light by raising the matter in the Gauteng Provincial Legislature and the Economic Development Committee thereof, as well as releasing an extensive dossier that exposes deep corruption in the relationship between the department and its implementing partner.
Key Findings from the Dossier Include:
FTH was given at least R7 million to date from the Gauteng Government, for the establishment of three distribution centres. However, the poor state of the Thokoza and Mamelodi distribution centres do not match the funds purportedly spent on them.
FTH financially benefited by misleading township entrepreneurs on how to access funding. The main purpose of FTH was to capacitate township entrepreneurs and enable them to access funding from the Kasi Mnotho Fund. FTH has failed dismally on that front as the vast majority of eligible recipients report receiving no funding.
Victimized entrepreneurs have faced intimidation, including legal threats, for seeking answers about the status of their promised funding.
FTH failed to cover stock and rental, for entrepreneurs who qualified for such assistance, leaving the entrepreneurs heavily indebted and some out of business.
The company grossly exaggerated its impact, claiming to have assisted hundreds of entrepreneurs across the province, created three distribution centres and enabled job creation, however, it has left a trail of destruction in its wake.
Oversight by the Economic Development Committee both in the 6th and 7th Administration uncovered glaring inconsistencies in the financial and operational reports from both Family Tree Holdings and GDED. The department has repeatedly ignored an official recommendation from the committee, that a forensic investigation be conducted.
This is an unconscionable betrayal of township entrepreneurs, who are the backbone of South Africa’s informal economy and central to driving local economic growth. With unemployment standing at 11.5 million, it is a moral failure that public funds meant for job creation and poverty alleviation are being looted by connected cronies.
BOSA is taking a firm stance, demanding that the SIU thoroughly investigate this matter and hold all implicated parties accountable. These funds belong to the people of South Africa, and their mismanagement is a direct attack on the country’s most vulnerable communities.
The township economy must be supported and protected to ensure its potential is unlocked, creating jobs, empowering small businesses, and transforming wealth creation. This will only be possible if corruption is eradicated, and those responsible are brought to justice.
BOSA stands in solidarity with the entrepreneurs who have been defrauded and calls on all whistleblowers and affected parties to come forward and help bring transparency and accountability to this issue.
Issued by Roger Solomons, BOSA Acting Spokesperson, 20 November 2024
